It took more than one click.
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Our family has made a pact to keep things simpler for Christmas gift giving. The rule is: one gift for each person and a limited amount of practical stocking stuffers, chosen off each person’s list.

Without seeing everyone’s list, my mind immediately goes to Amazon Prime. Why is Amazon my default? I know it is the default for my family members, too. I predict most people’s list will include an Amazon Gift Card for their main gift, and a variety of stocking stuffer items that can be easily and quickly ordered and delivered through Amazon Prime.

I bet our family is not alone making Amazon Prime our go-to place for Christmas shopping, and for many other events throughout the year. I have some friends that wait for Amazon Day as if it were Black Friday.  What we now take for granted began as one of Amazon’s riskiest ventures. From its intrapreneurial (internal entrepreneurship) journey life story, one that is still evolving, I share 4 lessons:
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Lesson 1: Cross-Stitch Internal and External Market Needs

Charlie, an Amazon engineer was annoyed and frustrated by the complexity, at both the backend and consumer end, of Amazon’s Super Saving Free Shipping. Buyers had to spend $25 on each order and click through multiple items, with no option for buying with one click. Then they had to wait 8-10 business days for their delivery. Charlie threw out the idea of buyers investing “a chunk of change” at the beginning of the year to get a sort of “all you can eat” Amazon shipping, at no shipping fee for the entire year. At the time, if you ordered 9 times a year, the initial investment paid for itself. Jeff Bezos took it a step further and challenged an eclectic group of employees to come with idea that combined “all you can eat free shipping” and reduced shipping time. Without a lot of market research and, as they called it, MBA spreadsheets, he knew people’s preferences for getting their purchases quickly.

Lesson 2: Metaphors and Icons Add Concreteness and Emotion to New Ideas

Around Thanksgiving 2004, the group combined ideas to execute Super Saver Shipping in new ways that buyers would love. Unfortunately, the ideation occurred in the middle of some serious website crash issues that brought Amazon down, just as the holiday buying season was gearing up. They cancelled their meeting with Jeff Bezos to fight the fires. Jeff understood but was on fire about the potential of the emerging idea. Version 1 of what was later to be called Prime was a membership model to get free shipping in 2 days and ½ price shipping in 1 day.

Bezos invited the team to his house on a Saturday in December and took them to his boat house. There he shared the vision that he wanted to draw a moat around Amazon’s best customers and change the psychology of people in terms of thinking as Amazon as their default products provider and shipper.

He also wanted to announce this new way of doing business at the Q4 earnings announcement set take place in January 2005. This gave them 4 weeks! They negotiated to 6 weeks to build and launch.  How in the world would they pull this off?!

Lesson 3: Stand On the Shoulders of Prior, Less Sexy, Innovations

The only way the original Amazon Prime could be built and launched in 6 weeks was to stand on the shoulders of work that had already been done to greatly reduce the fulfillment time in Amazon warehouses. Led by Jeff Wilke who had come to Amazon from manufacturing, new software had been written. Warehouse layouts had been rejiggered. And processes had been implemented based on lean manufacturing. Bezos and his team knew that this system called FastTrack would enable them to fulfill the promise of faster, free or cheaper shipping.

Lesson 4: Total Value = Revenue, Product Symbiosis, Mindset Shift

In addition to revenue, the value of Amazon Prime is its service as a fast, reliable conduit. It is the gateway to a huge portfolio of retail products, to entertainment, and to consumer expectations and data that feed intelligent systems to make Amazon better and better in anticipating and meeting buyer needs and at enticing advertisers.

In fact, Amazon Prime did not take off until it created a combination bundle with Amazon Video, offering free movies as part of the subscription. The more people that tried Prime to watch movies they loved, the more they converted their trial membership to an annual subscription, and the more retail products they bought. Retail revenue increased along with subscription revenue. This combination play fanned out to include other services like music, photos, credit cards, reading, and products exclusive to Prime members.  Each of these parts of Amazon’s overall business wins by partnering with Prime. Prime increases its membership and loyalty. Amazon fulfills its vision of becoming the default for buyers of just about everything!

There’s much more to the backstory of Amazon Prime than space allows me to share here. But consider this nugget a prime example (pun intended) of stories and strategies of innovation and internal entrepreneurial success that keep companies thriving and shoppers and their families smiling.

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